SK Hynix's U.S.-listed shares have erased nearly all of their post-IPO gains as a brutal sell-off in South Korean memory stocks spills across borders, dragging the Philadelphia semiconductor index deeper into correction territory.
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SK Hynix slides 9% as memory rout deepens after Korea sell-off
SK Hynix's U.S.-listed shares have erased nearly all of their post-IPO gains as a brutal sell-off in South Korean memory stocks spills across borders, dragging the Philadelphia semiconductor index deeper into correction territory.
SK Hynix Inc. (SKHY) fell as much as 9% in early trading Monday before paring losses to 3.3%, changing hands at $187.45 with a market capitalization of $1.37 trillion. The decline follows a 15.4% plunge in Seoul on July 13 — the stock's worst single-day drop on record — that wiped out the 13% gain from its Nasdaq debut just three sessions earlier.
"The two markets are becoming more intertwined than ever before, feeding off each other's tech concentration," said Nic Puckrin, cross-asset analyst at Coin Bureau. "It's a vicious circle, and it should worry equity investors."
The rout has erased more than 35% from SK Hynix's Korean-listed shares since they hit a record last month. Samsung Electronics, the country's largest stock, tumbled 11% on July 13, dragging the KOSPI index down 9% and triggering a marketwide trading halt. The selling cascaded into Tokyo, where the Nikkei 225 fell 1.9% as Kioxia Holdings collapsed 12.9%, Murata Manufacturing lost 8.1% and Renesas Electronics dropped 6.2%.
The expectations trap
The sell-off reflects a growing disconnect between surging earnings and even faster-rising expectations. SK Hynix's first-quarter revenue more than tripled year-over-year to 52.58 trillion won ($35.05 billion), while gross profit jumped 312.6% to 41.68 trillion won ($27.78 billion). But Korea Investment & Securities has warned that second-quarter operating profit, while up more than 550% from a year earlier, will still fall short of consensus estimates.
"This shows just how irrational investor expectations are becoming, and that sets a dangerous precedent," Puckrin said.
The pattern extends beyond SK Hynix. Micron Technology Inc. (MU) shares surged to a record in late June after blowing past quarterly estimates, only to slide 4% Monday. SanDisk Corp. (SNDK) tumbled 12%, Western Digital Corp. (WDC) fell 5% and Marvell Technology Inc. (MRVL) dropped 8%. The Roundhill Memory ETF (DRAM) lost more than 9%.
The PHLX Semiconductor Index (SOX), which more than doubled between late March and mid-June, has now fallen more than 15% from its peak — entering correction territory as the AI trade that powered the first half of 2026 shows signs of exhaustion.
What's at stake this week
The memory rout arrives at a critical juncture for the semiconductor industry. ASML Holding NV (ASML), the leading supplier of chip manufacturing equipment, and Taiwan Semiconductor Manufacturing Co. (TSM), the world's largest contract chipmaker, both report earnings this week. Both are expected to post strong growth driven by the hundreds of billions of dollars tech giants are pouring into AI infrastructure this year.
But the bar has been raised dangerously high. SK Hynix's explosive growth — its valuation has risen more than sevenfold in the past year — has made it one of the most volatile stocks in the market, with double-digit swings in three sessions this month alone. The company's $26.5 billion U.S. listing, the largest ever by a foreign company, has imported that volatility directly into the Nasdaq.
For investors, the question is whether this is a healthy correction in an overheated sector or the beginning of a deeper unwind. SK Hynix shares in Seoul are now down more than 35% from their peak, while the SOX sits 15% off its high — levels that historically have either marked buying opportunities or preceded further declines, depending on whether the underlying demand story remains intact. With ASML and TSMC set to report this week, the market will soon get its answer.
This article is for informational purposes only and does not constitute investment advice.
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